Economics

Prices, output, and hours: an empirical analysis based on a sticky price model

Article Abstract:

A sticky price model is shown to be consistent with certain facts which focus on the correlation of prices, hours and output. The model shows that unexpected movements in prices, hours and output are positively correlated. The revisions in output growth and hours are negatively related with the revisions in price growth. Moreover, the revisions in output growth over the next period are positively related with the price revisions.

Sticky-price models of the business cycle: Specification and stability

Article Abstract:

Research developing an equilibrium model of sticky price business cycles in the United States is presented. Particular attention is given to characteristics relating to price levels and inflation rates. Explanations of nterest rates movements are examined.